Interim
Joint Committee on Local Government

Minutes
of the<MeetNo1>2nd Meeting

of the 2007 Interim

<MeetMDY1>July 13, 2007

The<MeetNo2>second meeting of the Interim Joint
Committee on Local Government was held on<Day>Friday,<MeetMDY2>July 13, 2007,
at<MeetTime>10:30 AM, in the 2nd Floor Ballroom of the Galt House East in
Louisville, Kentucky<Room>. Representative Steve
Riggs, Chair, called the meeting to order, and the secretary called the roll.

Upon the motion of Senator Thayer, seconded by
Representative Henderson, the minutes of the June 20, 2007 meeting were
approved.

Representative Riggs welcomed everyone to the meeting and
announced that the committee was meeting in conjunction with the Kentucky
County Judge/Executive's Association (KCJEA) and the Kentucky Magistrates and
Commissioners Association (KMCA) joint summer convention. He then recognized
Senator Thayer for some comments. Senator Thayer said it was good to be in
Louisville and thanked the KCJEA and KMCA for inviting the committee to meet
during their joint summer convention.

The first item of business was an update on the Governor's
Blue Ribbon Commission on Public Employees Retirement Systems. Representative
Riggs introduced Mr. Bob Arnold, Executive Director of the Kentucky Association
of Counties (KACo). Mr. Arnold told the committee that participation by school
board employees in the state's County Employees Retirement System (CERS) is
costing local governments millions. He noted that the fact that 58% of CERS
membership is comprised of school bus drivers, cooks, school secretaries, and
other classified school employees is cause for concern.

Mr. Arnold stated that county and city employees pay $115
million a year to subsidize these employees who contribute less to the system
than local government workers. He explained that part of the problem is that
school board employees work nine months a year yet receive 12 months credit
once they retire. Mr. Arnold added that their relatively low pay compared to
the wages of county employees is also at issue since employees pay a percentage
of their salary toward retirement.

Mr. Arnold told the committee that the retirement system
should be looked at in its entirety, and that all employees should be protected
and represented.

Representative Graham commented that all groups must unite
as one organization as to what kind of retirement comes out. He added that the
groups should work together with the state. Representative Graham noted that
most school board employees work all year.

Representative Henderson asked if the administrators of
these groups have discussed their availability and commitment. Mr. Arnold
replied yes, and that they have also talked to KERS.

Senator Carroll commented that the retirement system's
health insurance costs, which do not come from the CERS pension fund but are
paid separately, are what is draining county budgets. He stated that we have to
address this issue by attacking the source of the problem, which is the cost of
health insurance. Senator Carroll added that poor health practices contributes
to the problem. He said that the General Assembly has balanced the state budget
at the expense of the retirement systems, and that the General Assembly has not
given counties the ability to help themselves.

Mr. Arnold stated that a subcommittee has been created to
study medical costs and health insurance.

Representative Hoffman commented that he shares concerns
about CERS's costs. He said that the state needs to ensure that current
employees and retirees have the benefits they need while protecting county
efforts at recruitment and employee retention.

The next item of business was a discussion of jail issues by
the KCJEA. Representative Riggs introduced Boyle County Judge/Executive and
KCJEA president Tony Wilder. Judge Wilder told the committee that counties are
at a crossroads with the costs of running jails. He said it is imperative that
the state and counties work together. Judge Wilder added that the KCJEA is
willing to offer leadership in getting the state and counties to form a
partnership. He then introduced Larue County Judge/Executive and KCJEA
legislative committee chair Tommy Turner to address the committee.

Judge Turner told the committee that jails present possibly
the greatest challenge facing counties since the creation of our Commonwealth.
He noted that it is quite the norm for counties to expend one-third of their
general fund to supplement jail operations, and, in some counties, it
approaches two-thirds.

Judge Turner explained that counties pay over $120 million a
year on jail costs, which has some counties on the verge of bankruptcy. He
noted that jail populations have increased as much as tenfold in the last 25
years due to stronger drug, DUI, child support and domestic violence statutes.
Judge Turner added that while the need for stiffer penalties is understood,
inadequate funding for county jails for housing these offenders is not. He
pointed out that there is a lag time between arrest of a person and the
subsequent sentencing of that person.

Representative Wayne encouraged the KCJEA to have a crisp
agenda when they come to Frankfort and demand a change. He told Judge Turner
that county officials should rally their forces.

Representative Graham commented that the upcoming election
for Governor in November is important and county officials should hone in on
the candidates. He warned them not to drop the ball.

Representative Denham asked if counties wanted the state to
take over the operation of jails or do they want the General Assembly to
appropriate more funds for the county operation of jails. Judge Turner stated that
the state taking over the operation of jails would be ideal.

The next order of business was discussion of county
initiatives for combating drug abuse by the KMCA. Representative Riggs
introduced Shelby County Magistrate, KACo and KMCA president Tony Carriss, and
Harlan County Magistrate Jim Roark. Mr. Carriss told the committee that
Kentucky ranks number one in using prescription drugs for non-medical purposes.
Mr. Roark stated that 70 to 80 percent of the prisoners in county jails are
there on drug related charges.

Mr. Carriss stated that counties need funding for DARE
programs. He said 2006 SB 34 should be passed to pay counties to provide fund
drug treatment programs and facilities instead of jail time.

Senator Carroll indicated that education is the key to
keeping people out of jail. He also advocated increasing the number of the
Kentucky State Police.

Representative McKee commended the Association for tackling
the drug abuse problem. He said drug abuse occurs even in small communities,
and that the availability of prescription drugs is enormous. Representative
McKee stated that hopefully by counties and the state working together, a
solution will be found.

Representative Crimm asked on average, how long a person was
incarcerated. Judge Turner indicated that the average jail term for a Class D
felon was around three years. Representative Crimm suggested that a committee
be formed to come up with recommendations for solving the jail issue.

Senator Thayer commented that this problem is an emergency
and that we need to act now. He added that the Governor is working on the jail
diversion issue.

Responding to Representative Damron's question relating to
electronic monitoring, Judge Turner indicated that the courts are using it, but
recidivism is a problem.

Mayor Jerry Abramson, Louisville Metro Government, addressed
the committee next. Mayor Abramson told the committee that Louisville Metro
Government has the same problems as other local governments in the area of
jails and pensions. He indicated that they will eventually pay more for an
officer's pension contribution than they do in salary for the office. Mayor
Abramson noted that the corrections cost is over $48 million a year and is
increasing at 10 percent a year. He also noted that Louisville Metro is the
only local government paying for a juvenile detention facility located within
its borders.

Mayor Abramson told members that he would like to see the
partnership continue between Louisville Metro Government and the state in order
to help the other 119 counties in the Commonwealth. In support, he mentioned
the tax money gained from projects such as the airport investment are manifold.

Mayor Abramson stated that he would like to see Louisville
Metro Government receive a portion of the sales tax like other counties, in
response to a question asked by Representative Denham.

Senator Thayer commented that so much could be solved with
more local control. He suggested parties representing counties should obtain a
copy of the 2006 Task Force on Local Taxation report.

The next order of business was review of the 2007 Kentucky
Small Cities Community Development Block Grant (CDBG) Program. Representative
Riggs introduced Ms. Myralee Cowley-Smith, Executive Director, Office of
Federal Grants, Governor's Office for Local Development (GOLD) to give an
overview of the 2007 CDBG application. Ms. Cowley-Smith told the committee that
there were very few changes from last year's CDBG. She noted that Kentucky has
$26,590,125 available for distribution. She explained that the 2007 CDBG area
allocations are as follows: $7,500,000 for Economic Development; $8,090,125
for Public Facilities; $3,000,000 for Public Services; $4,000,000 for Housing;
$3,500,000 for Community Projects; and $500,000 for Community Emergency Relief
Fund (CERF).

Representative Wayne commented that he was concerned about
there being less money for low-income housing and would have to vote no on
accepting the CDBG report as presented.

Senator Thayer commended Ms. Smith-Cowley and her staff at
GOLD for their good work over the years.

Senator Tori asked if any grants were given to faith-based
organizations. Ms. Smith-Cowley replied that she did not think so at this time,
but that several drug recovery programs are faith-based. She noted that if
cities and counties apply for the CDBG funds, local governments can work with faith-based
organizations.

Representative Crimm moved, seconded by Representative
Brinkman, to accept the CDBG report as presented and to submit it on to LRC.
The motion carried by voice vote with Representative Wayne voting "no."

The next order of business was the review of two Kentucky
Administrative Regulations. The first regulation reviewed was 815 KAR 7:125,
relating to the Kentucky Residential Code. Mr. George Mann, Deputy Director for
Building Code Enforcement with the Office of Housing, Buildings, and
Construction, explained the regulation. Representative Hoffman moved, seconded
by Representative Osborne, to accept 815 KAR 7:125. The motion carried by voice
vote.

The other regulation reviewed was 815 KAR 20:078, relating
to storage and installation of SDR 11, CPVC plastic pipe and fittings. Mr. Tim
House, Director of the Division of Plumbing with the Office of Housing,
Buildings, and Construction, explained the regulation. Representative Henderson
moved, seconded by Senator Thayer, to accept 815 KAR 20:078. The motion carried
by voice vote.

The last item of business was discussion of county election
costs. Representative Riggs introduced Mr. Vince Lang, KCJEA Executive Director,
and Mr. Richard Tanner, KMCA Executive Director. Mr. Lang expressed relief at
the lack of a need for a run-off state election. He indicated it would have
cost the counties $6 million. Mr. Lang told the committee that elections cost
the counties $1,400 per precinct, and that counties receive $250 to $300 from
the state for election costs for each precinct. He said there needs to be
adequate reimbursement from the state. Mr. Lang added that in some elections,
there are no local officials on the ballot. He stated that the state payment
for election costs should be raised from $300 to $1000 per precinct.

Mr. Tanner acknowledged that his organization knew that the
state could not take over the election costs in their entirety, but that more
money could be appropriated.

There being no further business, the meeting was adjourned
at 12:20 p.m.